Playing Politics With Energy Security – Ours and Europe’s
Mark Green
Posted January 26, 2024
America’s security and the security of our allies are too important for the political gamesmanship that’s fully transparent in President Biden’s announcement that he is freezing pending and future U.S. liquefied natural gas (LNG) projects. And that’s what it is: pure politics.
The freeze is not about climate, the administration’s public justification for restricting U.S. LNG projects – LNG can accelerate global emissions reductions by displacing higher-emitting fuels.
It’s not about American families and businesses – domestic natural gas prices remain among the lowest in the world.
It’s not about economics – LNG supports the jobs of thousands of Americans and adds billions to our economy.
It’s about politics.
“A Huge Win for Activists …” was the headline in the New York Times. A headline in The Hill said the administration had moved to “appease” an activist cohort – which, by the way, isn’t satisfied with an LNG moratorium. Some of those folks want a full stop on all oil and natural gas projects.
It’s cringe-worthy to hear some talk about winning a political game when the real issue is America’s security and the security of friends around the world. The clear winner in the administration’s freeze is Russia, and the clear losers are nations opposed to Russian aggression. “No one hates U.S. L.N.G. more than Vladimir Putin,” said Daniel Yergin, the vice chairman of S&P Global and an oil industry historian.
Mike Sommers, API president and CEO:
“It’s time for the administration to stop playing politics with global energy security.”
Let’s talk about what is true, and isn’t, in connection with the administration’s LNG announcement.
Myth: Europe doesn’t need any more U.S. LNG.
Fact: America’s LNG is critical for helping Europe replace Russian natural gas.
When Russia invaded Ukraine in 2022, America’s European allies denounced the aggression and committed to moving away from piped natural gas from Russia. U.S. producers met the moment, surging more than 800 LNG cargoes to Europe – a 141% increase from 2021.
The fact is, current market conditions notwithstanding, Europe faces a looming supply gap, as projected in this recent study. America is well-positioned to be that supplier, now and in the future.
But this is bigger than European supply and Europe’s security. America’s security is closely connected to the security of its allies, especially as they oppose Russian aggression in Ukraine. When America’s allies are less secure, America is less secure. U.S. Sen. Chris Coons, a Delaware Democrat, said LNG considerations must be “balanced with critical national security interests in terms of ensuring our vital allies and partners in Europe in the middle of Russia’s ongoing aggression are not abruptly cut off from gas supplies.”
Myth: LNG is worse for the climate than coal.
Fact: Natural gas is the leading driver of U.S. emissions reductions and as LNG can accelerate reductions globally.
This canard surfaced last year from an unpublished, as yet unreviewed, study by a long-time opponent of natural gas. Credible science has shown that switching to natural gas from coal in the power sector can reduce carbon dioxide (CO2) emissions by about 50%, which is the main reason America’s CO2 emissions from that sector are at generational lows. Natural gas has accounted for more than 60% of the CO2 reductions from the power sector from fuel switching since 2005.
Clearly, LNG could help other nations achieve similar reductions, and the administration’s decision to freeze U.S. LNG projects will have the perverse effect of helping increase the use of coal, which already was projected to reach an all-time high in 2023, with China and India leading the way. The International Energy Agency (IEA) estimated that by 2024, three out of every four tons of coal consumed would occur in China, India and Southeast Asia.
President Biden’s LNG freeze works against reducing coal consumption. Ellen Wald, a nonresident senior fellow with the Atlantic Council Global Energy Center, writes for MarketWatch.com:
“When LNG is too expensive or unavailable, countries switch to burning coal, which causes significantly higher carbon emission levels than natural gas. When Europe stopped importing Russian natural gas in 2022 following the invasion of Ukraine, countries such as Pakistan were priced out of the LNG spot market and reverted to burning coal. This is a net-negative for the environment. Natural gas’s superior reliability and scalability makes it impossible to replace with solar and wind power.”
Myth: LNG to other nations hurts U.S. consumers.
Fact: U.S. LNG supports domestic jobs and economic growth.
America’s natural gas prices remain among the lowest in the world according to IEA. While U.S. LNG shipments reached record highs in 2023, domestic prices declined 62% as U.S. natural gas production also surged to record levels. This shows the ability of America’s natural gas producers to meet rising global demand while keeping the domestic market well supplied.
LNG already has provided big jobs and economic benefits, as the U.S. has become the world’s leading LNG supplier. This is illustrated in an ICF study quantifying the potential benefits from fulfilling President Biden’s commitment to ship LNG to Europe: support 429,000 additional jobs-years from 2025 to 2030 or an average of 71,500 jobs in each year; spur $63.1 billion in capital expenditures for facilities and pipeline projects throughout the supply chain; and contribute a total of $46 billion to the U.S. economy over the five-year period.
America should be building more infrastructure, not restricting it.
In the current global environment, with war in Europe and in the Middle East, America should be focused on protecting Americans and America’s allies. On both fronts, the Biden administration’s LNG freeze is a leadership failure because it prioritizes politics over sound policy.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.